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Intel's laying off 12,000 people: Five hurdles Intel faces in the near future

Tamlin Magee | April 22, 2016
It's not plain sailing for Intel as it plans to realign its focus away from the PC market and towards data center and Internet of Things divisions.

There have been indications over the years of a rocky road ahead for Intel - and it faces some intriguing challenges to retain its dominance in the chip market.

From the emergence of smartphones to the perception of Intel as a monopolising juggernaught, here are a few of the factors Intel will have to face up to in the coming years.

The steady decline of the traditional PC market

We've seen traditional PC vendors like Dell and HP understand that the landscape's been changing over the years. Shipments worldwide have been decreasing - with recent Gartner reports pointing to a 9.6 percent global decrease and a 10 percent quarterly decline in EMEA over the last year.

Intel famously trounced its rivals, some would say by whatever means necessary, to gain the lion's share of this market. But consumer demand is unlikely to match anything seen in the heights of the PC market's heyday.

While we saw Intel have a good go at rebranding the personal laptop as the Ultrabook several years ago, this has failed to be the boon it hoped for. And although it bet big on Chromebooks, this too couldn't stem wider market declines.


A spokesperson for Intel once told me it's not about being first, it's about being best in the market.

But Intel has consistently failed to carve out its niche in the smartphone market. As of 2016, it's estimated that there are more than 2.5 billion smartphone users on the planet. This is only set to increase, and especially in the vital emerging markets where rural access to the internet counts on mobility as an alternative to traditional wired infrastructure.

In typically confident Intel fashion, the chip maker has asserted over and over again that it has the means to swamp the smartphone market with its product. But handset makers are opting for affordability, flexibility and performance in other options like ARM. Intel simply slept on mobile until it was too late and has been trying to claw back influence for years. But can Intel afford to lose this huge market in the long term?

Hyperscale threat

Intel's decision to cut 12,000 jobs has been labelled as a shift away from the declining PC market, increasing its focus on data centre sales instead. But it faces some challenges here too.

While Dell and HP are currently among the biggest chips buyers in the world, hyperscale data centre operators such as Google are accountable for more and more of global server sales.

Interestingly, Google has let fly some indications that it might be considering Qualcomm chips, with rumours of a partnership announcement between the two earlier this year. This didn't turn out to be the case - but there's still talk about Google planning to diversify.


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